Let me ask you a question: How many ways do you think exist to make money?
Most people never bother to ask this foundational question.
While you think about it, I’ll mention that there are two answers I’ll accept for this question. But there’s only one answer that I consider to be the true answer.
The merely acceptable answer is “infinite.” There are infinite ways to make money. I have ideas for making money that probably have never occurred to you. You probably have ideas that have never occurred to me.
Many of the ways that people are making money today didn’t even exist 50 years ago. Or in some cases, even five. Think Playing video games, being an Instagram influencer, or selling NFT’s. Many ways that people will be making money 50 years from now haven’t even been invented yet.
But that’s not the best answer.
Here’s the best answer:
There is only one way to make money.
That begs the question, what is the one way to make money?
Again, I’ll let you think about it. While you do I’ll mention that there are other ways to “get” money without “making” or earning it. For instance, you could find it, steal it, or win the lottery. But none of these is a reliable way of acquiring money. The lottery is a tax on the poor. Stealing is immoral and illegal. Finding money is a good way to make about $1.50 a year. Maybe you’ll get a big inheritance or something and that technically counts. But don’t bet on it.
You might be tempted to answer “hard work.” It’s true that hard work if usually intimately linked to making money, but the connection isn’t perfect. It’s possible to work hard and not make any money at all. And some people are making lots of money without working very hard.
So what is the one way to make money? Selling
Everyone is Selling Something
You can sell a product. You can sell a service. You can sell someone else’s product or service. You can sell an asset like a house or a share of a company. You can take a product and sell it like a service and call it a rental.
Everyone is selling something.
The closest thing I’ve ever found to an exception was when I explained this idea to an 11-year old kid (kids are smart). He instantly started to poke holes in my logic.
“My dad doesn’t sell anything,” he said. This boy’s dad was the pastor of a church made up of mostly college students who are too broke to tithe. He makes his money by soliciting donations which go to a missions organization which then pays him a a salary.
Fortunately he didn’t stump me for long. “Your dad is selling his mission,” I replied. “No one would support him financially if he wasn’t doing anything meaningful. Besides, you dad goes on literal sales calls to get people to join his support team [which are called something different, but since there’s a sales pitch, I call them sales calls].”
You know your theory holds water when you can defined it against an insightful 11-year old.
What Most People Sell
By far and away the most common thing people sell is their time.
You might object that they are selling their skills and experience, but most of the time this isn’t true. Those are what they sell at the interview. At their job they sell time for money. The proof is the metric they get paid by:
- A Salary is just the price of labor for a year
- A Wage is just the price of labor for an hour
Both of those are just units of time.
Your employer will have a hard time evaluating if you’re putting in enough effort, but they’ll come down on you quickly for not putting in enough time.
It’s important to remember that this isn’t the only way to make money. It’s just one business model among many and it has its own pros and cons. Some people who achieve fantastically high rates for their time do really well trading time for money.
The Biggest Drawback
Ultimately, your time ends up being more valuable than money.
We spend a huge chunk of our lives trading time for money and call it working. Then we flip gears entirely and start trading money for time and call it retirement.
At the end of your life you’ll wish you had more time, not money.
Time is a precious scarce resource that is constantly being spent. Money is a renewable resource that you can make more of when you need to.
One key difference between money and time is that you can’t “save” time like you can save money. We use the phrase “save time,” but all we really mean is getting things done more quickly. If it usually takes you 30 minutes to do something and you do it in 20, you “saved” 10 minutes. Except, you can’t put 10 minutes in the bank like you could if you saved $10. You can’t pull it out when it’s needed.
The time you save is always spent immediately.
There are roughly three ways to use your time:
- Waste it: Activities that provide no current or future benefit (e.g. mindlessly scrolling Facebook)
- Spend it: Activities that provide a current benefit (e.g. trading time for money)
- Invest it
That’s right, just like you can invest money, you can invest time. Since we know the one way to make money is by selling, one way to invest your time is to create something you can sell besides time.
The reason why I build websites and record podcasts and write on Medium and post on YouTube is because the content that I create can keep earning money long after I’m done working on it.
Something that happened to me recently reminded me of this point. There’s a website that I created in 2016 and abandoned in 2017. I’ve literally not done a single thing on it in over four years. I checked the Google Adsense account that was linked to it earlier this week and it turns out I made $9 last month and $8.75 this month.
The only reason I haven’t noticed is because this adsense account is also linked to my YouTube channel, so the extra money just gets added to my YouTube check. Now, $9 isn’t life-changing money, but this is a site that I never built up to the kind of levels where real success is achieved. I monetized it inefficiently. And it still keeps making money month after month.
This is a site that I plan on sticking with and building for the long term. My editorial calendar is overflowing with 300 post ideas that will take me a long time to work through.
But I’m going to invest the time. The biggest thing that’s held me back when it comes to writing online is spreading myself thin over two many projects and never giving any of them the time they need to become valuable assets. A blog with 25 posts isn’t valuable. A blog with 100 posts is starting to get valuable. A blog with hundreds of posts is very valuable.
Other Ways to Invest Your Time
You can also invest time at your job. Yes, this is keeping you in the trading time for money loop, but trading time for money is better at higher pay levels.
Getting a raise or promotion isn’t something that happens overnight, so you’ll have to play the long game; you’ll have to invest time while everyone else is busy spending it.
You can make a game plan for getting a raise using a strategy like the briefcase technique
Related Post: Earn More the Simple Way
However you go about investing your time, remember that you are going to reap what you sow. Your future is being shaped by the decisions you are making in the present. If you invest your time and your money wisely, you’ll be sitting on a huge stash of cash. If you mismanage your time and money now, you’ll be sitting on a huge pile of bills (the less fun kind).
Remember, if you are making money, you are selling something. What are you selling? How could you improve your offering to charge more for it? How could you get more customers? Is there another product or service that you should be selling in addition to or instead of your current offerings?
You need to treat your income earning potential like its own business. All of us are entrepreneurs, it’s just that some of us only have one client.